Good morning.
Is empathetic leadership over?
That’s the thesis of an article this week from our one-time sibling publication, TIME. And the authors have plenty of evidence to support it: Amazon’s Andy Jassy requiring a return to work; Salesforce’s Marc Benioff instituting a strict performance culture; Delta Air Lines banning its own employees from Delta Sky Clubs; Goldman Sachs nixing free coffee. As layoffs grow and the economy weakens, power is perceptibly shifting from employees to employers.
But don’t let the cyclical noise obscure the long-term trend. As I argue in Tomorrow’s Capitalist, the economy has changed dramatically over the last 50 years, with physical capital becoming ever less important in determining corporate value, and human capital becoming ever more. The companies that win in the future may or may not offer free food or unlimited time off. But they will be those that figure out how best to attract, retain and fully engage great talent.
The debate over return to work is a case in point. It’s no surprise employers want their employees to spend more time in the office. People are social animals, and team building is a contact sport. But it’s also no surprise that employees are clinging to the flexibility that they enjoyed during the pandemic. The challenge is combining the best of both. And I’d still put my money on those who creatively figure out the answer to that challenge.
By the way, one of today’s great business stories is Howard Schultz’s return to Starbucks, with the goal of beating back unionization efforts. In an interview this week, he said he came back because his company had “lost its way culturally.” But fixing that is no easy matter. I returned to Starbucks as a regular customer during the pandemic because of the ease of ordering on the app and picking up in store. But the result of that change is that Starbucks employees have became the equivalent of production line workers. Happy customer, unhappy worker.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
